Prospering through Prospera: CCT Impacts on Educational Attainment and Achievement in Mexico

Abstract

This paper develops and estimates a dynamic model of student enrollment, school choice, academic achievement and grade progression to evaluate the impacts of Mexico’s conditional cash transfer program Prospera on educational outcomes over grades 4-9. Academic achievement is measured by nationwide standardized test scores in mathematics and Spanish. Enrollment decisions are the outcomes of sequential decisions at each age from individuals’ feasible choice sets, determined by the types of schools locally available and local-labor-market opportunities. The achievement production function has a value-added structure. Model parameters are estimated by maximum likelihood using nationwide administrative test-score data (the ENCEL data) combined with survey data from students and parents, census labor-market data, and geo-coded school-location data. The estimation approach controls for selective school enrollment in different types of schools, grade retention and unobserved heterogeneity. The results show that the Prospera program increases school enrollment and academic achievement for program beneficiaries in lower-secondary school grades (grades 7-9). The average test-score impacts are 0.09-0.13 standard deviations in mathematics and 0.03-0.05 standard deviations in Spanish. Students from the most disadvantaged backgrounds experience the largest impacts. The availability of telesecondary distance-learning schools is shown to be an important determinant of the Prospera program’s impacts on educational outcomes.